Relationship between economic growth and the environment: application using an ARDL model

Abstract

This article focuses on the problem of the evolution of carbon dioxide (CO2) emissions and examines whether economic growth negatively affects the environment by testing the validity of the Kuznets environmental curve for Morocco. To this end, an ARDL (Auto Regressive Distributed Lag) method is used to detect the conformity of the Kuznet hypothesis, for a period from 1990 to 2021.

The first part of the paper presents an analysis of energy demand in Morocco, the evolution of CO2 emissions by sector and fuel type, and the energy strategy adopted by the country. The second part uses econometric tools to examine the long-term relationship between CO2 emissions and real Gross Domestic Product (GDP) per capita, while introducing explanatory variables such as energy consumption and international trade as control variables. The results of the econometric analysis using the ARDL model validate the Kuznets environmental curve hypothesis for Morocco.

Keywords: Economic growth, Environment, Kuznets curve, ARDL.

Classification JEL: C22, Q43, Q53, Q56.

Paper Type: Empirical research